Foster's suitor takes bid direct to shareholders
Source: Agencies |
August 18, 2011, Thursday
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GLOBAL brewer SABMiller has taken its US$10 billion bid direct to Foster's Group shareholders, days before Foster's announces its annual results, having failed to win over the Australian company's board.
The cash offer, at A$4.90 a Foster's share, was similar to SABMiller's first approach in June, though the London-based brewer said the offer would be reduced by any future dividend paid by Foster's, with analysts forecasting a 15 cent second-half dividend to be announced next week.
Foster's third-largest shareholder saw yesterday's move by SABMiller as a way to get the ball rolling on a deal after Foster's refused talks, and was not surprised SABMiller came back at A$4.90, the price it initially proposed.
"As a shareholder, the move is welcome in that it will get the parties engaged," said Matthew Williams, Australian equities manager at Perpetual Investments, which has a 4.7 percent stake in Foster's.
"The ball is in play," he said, adding that his company has not been approached about its position either by the Foster's board or by SABMiller.
SABMiller has unsuccessfully tried to engage with Foster's over the past two months, and its preferred route is still to go for a recommended bid, according to analysts. Under Australian stock market rules, it now has two months to submit a formal bid.
Foster's rejected SABMiller's June offer immediately. Chief executive John Pollaers said it was so low it was not worth discussing. He recently came under fire from some shareholders for failing to engage with SABMiller.
Foster's declined to comment further yesterday.
SABMiller has its financing in place and is ready to go ahead with its bid without waiting for Foster's annual results on August 23, which are expected to show a decline in beer profits, analysts said.
The cash deal values Foster's at A$9.5 billion (US$10 billion) before debt. Taking debt into account, the bid's enterprise value is A$11.2 billion.
A deal would join the brewer of Miller Lite, Peroni and Grolsch with the Melbourne-based maker of Victoria Bitter, Pure Blonde and Cascade beer, and would be the biggest brewing deal since InBev paid US$52 billion for Anheuser-Busch to form AB InBev in the world's biggest cash takeover in 2008.
The cash offer, at A$4.90 a Foster's share, was similar to SABMiller's first approach in June, though the London-based brewer said the offer would be reduced by any future dividend paid by Foster's, with analysts forecasting a 15 cent second-half dividend to be announced next week.
Foster's third-largest shareholder saw yesterday's move by SABMiller as a way to get the ball rolling on a deal after Foster's refused talks, and was not surprised SABMiller came back at A$4.90, the price it initially proposed.
"As a shareholder, the move is welcome in that it will get the parties engaged," said Matthew Williams, Australian equities manager at Perpetual Investments, which has a 4.7 percent stake in Foster's.
"The ball is in play," he said, adding that his company has not been approached about its position either by the Foster's board or by SABMiller.
SABMiller has unsuccessfully tried to engage with Foster's over the past two months, and its preferred route is still to go for a recommended bid, according to analysts. Under Australian stock market rules, it now has two months to submit a formal bid.
Foster's rejected SABMiller's June offer immediately. Chief executive John Pollaers said it was so low it was not worth discussing. He recently came under fire from some shareholders for failing to engage with SABMiller.
Foster's declined to comment further yesterday.
SABMiller has its financing in place and is ready to go ahead with its bid without waiting for Foster's annual results on August 23, which are expected to show a decline in beer profits, analysts said.
The cash deal values Foster's at A$9.5 billion (US$10 billion) before debt. Taking debt into account, the bid's enterprise value is A$11.2 billion.
A deal would join the brewer of Miller Lite, Peroni and Grolsch with the Melbourne-based maker of Victoria Bitter, Pure Blonde and Cascade beer, and would be the biggest brewing deal since InBev paid US$52 billion for Anheuser-Busch to form AB InBev in the world's biggest cash takeover in 2008.
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